Thanapisal Koohapremkit is the CEO of Globlex Securities, one of the leading brokerage houses in Thailand. He spoke with The Prospect Group about gold price projections for 2013 and what needs to be done to attract institutional investors to Thailand’s capital markets.

Thanapisal Koohapremkit

What are Globlex Securities’ growth and expansion plans?

KOOHAPREMKIT: Globlex Securities is currently expanding our retail base. This year we are increasing the number of branches we have in preparation for the ASEAN Economic Community (AEC). We are also concentrating on maintaining our top market share in the Thailand Futures Exchange (TFEX). We also want to diversify our business into more of a commodity house. Next year, we are planning to apply to the Foreign Exchange (FX), which is for agriculture futures. We will be heavily involved in that, and we will try to introduce more commodity products to our clients.

How competitive is the brokerage market in Thailand at the moment?

KOOHAPREMKIT: The market is very competitive. Last year we used sliding commissions. Now they are freely negotiable. In this situation, larger traders are more likely to negotiate for better fees. You must maintain your company structure and the numbers that will make you break even. Those who have retail-heavy portfolios will be the ones trying to balance the commission rates. If your strategy is a price war, you will eventually lose out. The market is very competitive in Thailand, and it is advantageous to look for new markets and people with spending power.

What more can be done to attract institutional investors to the Thai market?

KOOHAPREMKIT: I think if you compare Thailand to certain neighboring countries, such as Singapore, you see a lot of institutional volume coming in, and dominating the market. Here it is the other way around. We are still very sensitive to foreign volumes. The whole market will follow the fund flow of foreign institutions. We have to attract long-term funds as opposed to short term hedge funds. In order to attract those funds, we need to believe the ASEAN community has a higher growth potential than elsewhere. European and American markets are struggling, and China’s growth has stabilized. The ASEAN market currently represents a good opportunity for people looking to invest.

What are your projections for gold prices in the form of bullion or futures going forward in 2013?

KOOHAPREMKIT: We think the gold prices has enjoyed QE1 and QE2 over the last two years. I think due to the financial crisis in Europe, the price has fallen due to panicked sell off. I think the inflation is still there in terms of QE3. I think money will continue to be pumped in to sustain the liquidity in the market. I am sure the gold price will be supported by this. In the long term, gold, silver, and precious metals will enjoy a good run, even though prices have been stable recently. For securities, we are a market maker for gold futures. We provide liquidity for the exchange rate for gold futures. We are the number one ranking company in the Thailand Futures Exchange (TFEX). We are heavily involved in gold futures liquidity. Our holding company does physical gold. We import and export in physical gold for clients. Our competitive advantage is we are the first house to do this with physical gold.

In the long term, gold, silver, and precious metals will enjoy a good run, even though prices have been stable recently.

What are the biggest strengths and challenges in the Thai regulatory market?

KOOHAPREMKIT: There is a good level of liquidity in the Thai market, which is a strong point. We have a number of strong local banks as well. We also have a strong energy sector that can compete with others around the world. Thailand is also a geographical hub in Southeast Asia. Thailand’s human capital is one of our weaknesses however. We do not have enough language training, or education. Our retail clients are not sophisticated enough to invest in new products. These are a few weaknesses and strengths.